MGM Resorts International (MGM) said it plans to sell $500
million in six-year notes and intends to use proceeds to repay part
of the $1.2 billion it owes under a credit facility.
Shares were up 1.4% at $11.40 in recent premarket trading.
The Las Vegas-based resort owner has struggled amid steep drops
in tourism and consumer spending in its home down. A heavy debt
load taken on to fund expansion efforts has also weighed on the
company, but it has regrouped recently with capital-raising efforts
including stock and asset sales.
Fitch Ratings and Standard & Poor's Ratings Services both
recently raised their outlooks on the company, citing the efforts
to improve liquidity.
MGM said Monday the senior notes, to be sold through a private
placement, will be used to repay borrowings owed to lenders under
the senior credit facility who have not agreed to extend their
commitments on or before the October 2011 due date.
Debtors have often sought to amend and extend their borrowings
in recent years, but the last few months have seen a surge of
borrowers issuing notes to repay existing debt.
Separately, Boyd Gaming Corp. (BYD) said Monday it won't
exercise its right to match an offer for MGM's stake in the Borgata
resort in Atlantic City, N.J. MGM said earlier this month it
received an offer that valued the interest at slightly less than
$250 million, without disclosing the seller. As MGM's partner in
the property, Boyd had a right of first refusal on such a sale.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com